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Balancing the Tides: the Rising Importance of ESG

In recent years, a new concept has taken the corporate world by storm: Environmental, Social, and Governance (ESG). This term has become a buzzword in business circles, reshaping the ways companies operate. ESG provides a framework for businesses and organisations to align their operations and practices with broader global objectives of sustainability and social responsibility, such as those outlined within the United Nation Sustainable Development Goals (SDGs). With respect to marine industries, ESG underpins the blue economy’s goal to develop a system wherein both the ocean and the people who rely on it work together to live harmoniously.


In this week’s blog post, we will delve in the rising importance of ESG in today’s economy. Through the lens of aquaculture, we explore how ESG is shaping the blue economy.


Breaking Down the ESG Acronym



The Rising Importance of ESG:


The rising significance of ESG can be attributed to several key factors. Most importantly, companies are being incentivised to consider ESG criteria due to mounting pressure from investors and consumers. Now more so than ever, investment decisions are increasingly based on sustainability and the recognition that robust ESG performance correlates with long-term resilience and growth. Consumers are also driving the ESG movement as they become more conscious of a company’s societal and environmental impact. To remain competitive and harness consumer purchasing power, companies must incorporate ESG into their operations. Finally, companies are being compelled to adapt through regulatory changes and reporting requirements demanding ESG transparency.


Case study: Driving Sustainability in Aquaculture Using ESG


Aquaculture involves the farming of fish, crustaceans, and other aquatic species under controlled conditions in freshwater and marine habitats. The recent rapid growth experienced in this sector has been accompanied by a number of social and environmental issues such as high levels of greenhouse gas emissions, adverse effects on biodiversity, effluent pollution and intense antibiotic usage.


In light of these issues, ESG presents an opportunity to support the delivery of solutions that simultaneously improve sustainability and profitability in the industry:


  1. Sustainability-Linked Loans (SLLs): SLLs link interest charges to the improvement of a companies’ ESG score or sustainability key performance indicators (KPIs). In 2022, the Tassal Group (Australia’s largest salmon producer) signed for a $497 million SLL. Through this loan, Tassal is incentivised to address key sustainability criteria including reducing greenhouse gas emissions, increasing feed use efficiency, and committing to improvements required to maintain Aquaculture Stewardship Council (ASC) certification.

  2. Integrated Multi-Trophic Aquaculture (IMTA): IMTA involves the production of multiple species in a way that optimises resource utilisation and minimises environmental impacts. A net-positive effect on water quality is produced through the culture of fish in combination with filter species such as seaweed and bivalves. It has proven highly successful in reducing effluent pollution and the wastage of excess feed.

  3. Probiotics: probiotics are used to improve the natural resistance and wellbeing of juvenile fish produced in hatcheries. This approach has proven highly successful in reducing the use of antibiotics, preventing antibiotic resistance, and promoting environmentally friendly production. For example, use of probiotics in white shrimp production led to 94% decrease antibiotic usage.

  4. Hydro-Acoustic Systems: these systems detect noise levels amongst fish. This technology has been used by operators in the salmon farming industry reduce feed waste. As salmon make less noise when they stop eating, operators use hydro-acoustic systems to determine when to stop feeding. The reduction of feed waste using this approach has huge environmental and economic benefits.


Greenwashing: Diluting the Impact of ESG


Greenwashing is a marketing tactic employed by companies to exploit the best intentions of investors and consumers. It involves the provision of misleading information to falsify or exaggerate environmentally conscious practices. This approach is giving rise to a system whereby companies are providing false claims about the sustainability of their operations without demonstrating genuine commitment to environmental responsibility. This issue highlights the complexity of navigating ESG in today’s economy. The onus is on investors and consumers to seek out companies that genuinely support sustainability initiatives. With respect to seafood, the independent audit processing involved in certification schemes (e.g., MSC, ASC and BAP) offers an excellent starting point.


Blueshift Consulting: Your Partner in ESG Solutions

Blueshift Consulting excels in offering expert guidance and consultancy services for businesses striving to meet their ESG targets and commitments. We have a track record of success in helping companies align their operations with sustainability goals. If you are interested in how we can help you to navigate the complexities of ESG reporting and compliance, please get in touch via our website: www.blueshiftconsulting.com.au.

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